Feed: Slashdot
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Title: AI Licensing Deals With Google and OpenAI Make Up 10% of Reddit's
Revenue

Link: https://tech.slashdot.org/story/25/02/14/0019...

Reddit's recent earnings report revealed that AI licensing deals with Google
and OpenAI account for about 10% of its $1.3 billion revenue, totaling
approximately $130 million. With Google paying $60 million, OpenAI is
estimated to be paying Reddit around $70 million annually for content
licensing. Adweek reports: "It's a small part of our revenue -- I'll call it
10%. For a business of our size, that's material, because it's valuable
revenue," [said the company's COO Jen Wong]. The social platform -- which on
Wednesday reported a 71% year-over-year lift in fourth-quarter revenue -- has
been "very thoughtful" about the AI developers it chooses to work with, Wong
said. To date, the company has inked two content licensing deals: one with
Google for a reported $60 million, and one with ChatGPT parent OpenAI. Reddit
has elected to work only with partners who can agree to "specific terms ...
that are really important to us." These terms include user privacy
protections and conditions regarding "how [Reddit is] represented," Wong
said. While licensing agreements with AI firms offer a valuable business
opportunity for Reddit, advertising remains the company's core revenue
driver. Much of Reddit's $427.7 million Q4 revenues were generated by the
ongoing expansion of its advertising business. And its ad revenue as a whole
grew 60% YoY, underscoring the platform's growing appeal to brands. [...]
Helping to accelerate ad revenue growth is Reddit's rising traffic. While
Reddit's Q4 user growth came in under Wall Street projections, causing shares
to dip, its weekly active uniques grew 42% YoY to over 379 million visitors.
Average revenue per unique visitor was $4.21 during the quarter, up 23% from
the prior year. While Google is "nicely reinforcing" Reddit's growth in
traffic, Wong said, she added that the site's logged-in users, which have
grown 27% year-over-year, are "the bedrock of our business."

Read more of this story at Slashdot.

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